Delayed tax bills means Newfound towns borrow money, open lines of credit

BRISTOL — The selectboard granted Town Administrator Christina Goodwin's request to take out a $1.7 million tax anticipation note at their meeting on Nov. 21 in order to pay the county tax bill and continue meeting other municipal expenses until property tax payments begin coming in.

Bristol and other towns in the Newfound Area School District are unable to send out tax bills until the New Hampshire Department of Revenue Administration sets their tax rates; and the department cannot set tax rates until School Administrative Unit 4 files its year-end financial report for fiscal year 2023-24. SAU 4 business administrator Angela Carpenter has been trying to pull the information together for the year-end report, but is still dealing with financial records in disarray after Newfound’s accounting software was compromised during a cyberattack a year ago.

Carpenter inherited the problem from former business administrator Robin Reinhold, who had to resort to the use of consumer software to keep track of financial transactions while a Seacoast-based cyber protection company cleansed and got the district’s computers back online. The central office now backs up its information to “the cloud” to avoid such a disruption in the future.

Goodwin says Bristol has taken cyber security a step further, with a network overhaul that, in addition to backing up to the cloud, backs up information to internal servers at different locations.

“We redesigned our whole network — expensive, but it’s part of the five-year plan to protect us,” she said. “One of the things we found out was we did have some exposure with the school. Thankfully, they were not on the fiber at the time, because the way the fiber was set up, there was a back door that [potentially] would have come into the town.”

When the broadband network was put in place, it connected school and municipal servers, as well as those serving Plymouth State University. Goodwin said Bristol has all-new hardware and created a barrier between the flow of school information and town information on the fiber network. The Bristol Police Department has its own secure segment.

“We all link together, but there are different ways to keep them segregated,” Goodwin said. “Everybody links back to this building, and we’re working on redundancy where it’ll also back up to the public safety building if something should happen. Once we’ve closed the loop all the way, we’ll have a circle, so if we break over here, you can come back over here.”

The fiber equipment is enclosed in a secure closet, and the University System of New Hampshire also moved its equipment inside.

“It makes it more manageable to know where the brakes are, and also easier for them to come in" and make repairs, she said.

Meeting financial obligations

The delay in sending out tax bills creates cash-flow problems for Newfound Area towns, and SAU 4 has agreed to let the towns postpone their monthly payments to the school district. Goodwin says Bristol ceased making its school assessment payments in October.

“We didn’t pay them in October, we’re not paying in November, and we most likely won’t pay December until we can get a tax rate,” she said.

The amount Bristol owes to SAU 4 at that time will be $1.5 million; but there also is a statutory obligation for towns to pay the county tax assessment by Tuesday, Dec. 17, in order to avoid a 10% penalty. Bristol’s Grafton County assessment is $1 million, Goodwin said. That means that, even with the town borrowing $1.7 million — the most it is allowed to borrow in anticipation of taxes — it is still not enough to make the school payment. The $700,000 remaining after Bristol’s payment to Grafton County would be needed to keep the town running, she said.

Other towns are facing the same situation. Alexandria has not yet had to borrow money, but Bridgewater has obtained a $1 million tax anticipate note in the form of a line of credit which it has yet to use. While it is continuing to make payments to the school district, Bridgewater has delayed those payments from the 1st to later in the month.

Danbury also has obtained a line of credit and just recently made its October payment to the school district.

New Hampton has secured a line of credit but has not had to draw upon it. Town Administrator Corey Davenport said he is keeping a close eye on day-to-day finances in hopes of avoiding the need to borrow.

“There’s a few variables out there that would kind of cause us to take it sooner rather than later,” he said. “Right now, we’re kind of, like I said, juggling to ensure that we don’t have to take it until we absolutely need to. We do have a drop-dead date of the middle of December” — the deadline to pay the Belknap County assessment.

Groton Town Administrator Sara Smith declined to discuss the town’s financial status, but said, “The main concerns that we have at this time have to do with sending the tax bills later than normal and receiving the tax money later than normal, probably even into the different tax year. Doing the tax bills later can affect different reporting that we do, such as the [Department of Revenue Administration report] and other reports. Also, we have a timeline we follow every year so our residents, selectboard, tax collector, and everyone are used to our tax bills already being sent out by now. Therefore, we have a lot of people asking about this and we are not even able to provide them a date that we are going to be sending them, that they can expect to receive them, or that the bills will be due, which is an inconvenience all around and is leading to more calls and concerned residents.

“Unfortunately, we have to wait until they have completed their part before we can do ours. We are hoping that the Newfound Area School District will get this completed quickly so that we can then work quickly on our end to get these bills out to our residents.”

Attempts to reach officials in Hebron were unsuccessful as of press time.

Those delayed payments to the school district raise the question of how the schools will be able to pay their bills.

Superintendent Paul Hoiriis said he will be addressing just that question in anticipation of the Nov. 25 school board meeting. The agenda calls for the central office to provide an update on last year’s budget, a payroll audit, and a current budget update.

Work on next year’s budget will be especially challenging because of the withdrawal of three member towns, leaving four towns to pay for the schools and the entire cost of the central administrative office. While the departing towns had offered to pay their share of SAU 4 expenses if they could make use of superintendent services, the school board refused to accommodate them. Having just four towns carry those costs will make it more difficult than it has been to keep the budget within the Newfound’s tax cap.

The Newfound Area School District Budget Committee, charged with setting budgets and monitoring their use, has not met this fall and has even considered dissolution. Instead of actively helping to shape the coming year’s budget, the committee has indicated that it would wait for the administration to present a proposal before meeting again.

That delay in working on the budget also has delayed negotiations on a new collective bargaining agreement for teachers, with the current contract expiring on June 30, 2025. The new Pasquaney School District cannot settle with teachers until Newfound has ratified its collective bargaining agreement because, by law, Pasquaney must meet or exceed those terms in its own initial teachers’ contract.